4 Reasons Why Ad Fraud Matters to Local Markets

Dr Augustine Fou, cybersecurity and ad fraud researcher, thinks you should be paying attention to the local ad fraud discussion.

Susan Kantor, Vice President, Marketing, Alliance for Audited Media

With audience targeting becoming more sophisticated and accurate, marketers are aiming to get their ads in front of local audiences at exactly the right place at the right time. These valuable local consumers were traditionally reached by advertising in local news media, television and radio companies, but advances in technology are allowing many marketers to turn to geotargeting, targeting ads based on the location provided by mobile devices’ GPS. But doing so also exposes marketers to digital ad fraud—specifically where fraudsters use fake mobile devices to pretend to be in specific locations to steal locally targeted ad budgets. Recent research from BIA/Kelsey estimates that out of $76 billion in local ad spending, almost $3 billion is lost to this kind of geotargeting ad fraud annually.

Here are four reasons why Dr Augustine Fou, cybersecurity and ad fraud researcher, thinks you should be paying attention to the local ad fraud discussion.

This is the year mobile ad spending is expected to surpass television advertising in the U.S. With so much investment flowing into mobile, it’s not a surprise that fraudsters go where the money is.

“In mobile, anti-malware and fraud detection technology is often immature or non-existent,” explained Fou. “This makes it easy for fraudsters to get away with stealing dollars from legitimate publishers and marketers.”

2. Fraudsters See Local Markets as the Next Frontier

National marketers have increasingly cracked down on ad fraud, making it more difficult for fraudsters to steal money from those ad budgets. But at the same time, fraudsters have become more sophisticated and devised ways to avoid detection.

Fou continued, “Fraudsters are also looking for easy targets and quick money—making local ad spending the next frontier in the digital ad fraud fight. Many local publishers and advertisers are not prepared to handle this assault.”

3. Locations are Easy to Fake

The promise of geotargeting is appealing—reach local audiences based on their location.

“A simple mobile emulator can easily fake locations by simply declaring the GPS coordinates,” said Fou. “The mobile apps that run ads get this location data but have no way to verify the data’s authenticity.”

4. Local Publishers Must Understand Their Value and Defend Their CPM

Knowledge is power. Understanding how ad fraud occurs and explaining to marketers why using programmatic geotargeting makes them vulnerable to fraud can help local news media organizations defend their CPMs.

“Local publishers have real audiences—the people who live and work in the communities and consume the content they create,” explained Fou. “Marketers need to understand the risks of ad fraud in geotargeted campaigns and consider spending their ad budgets directly with local publishers to avoid those risks.”